CNN Math

[rhyme]

Ok so it's not totally related to the GMAT, but these kind of questions come up on the GMAT and got me thinking ..

 

http://money.cnn.com/2005/03/21/real_estate/financing/ratehikes/index.htm

 

"We find that a 1 percent increase in rates reduces prices about 3 percentage points relative to where they would be otherwise." In other words, if population growth or an improving economy point to a 10 percent increase in home prices, a 1 percent increase in interest rates will bring that appreciation down to 7 percent.

 

It begs a question - since things like this do come up on the GMAT ... would you solve this as :

 

X + 10% - 3% = X + 7%

 

or

 

X + 10% followed by a 3% decrease? that is, ( X + 10%) - 3% , which isn't 7%....

 

I've seen questions like these on the gmat (if john increases prices by 10% and offers a 5% discount, what percent price change occured?)

 

I've always read these as X + 10%, followed by a 5% decrease, not just 10% - 5% = 5%...